South Korea’s household debt hits record high in Q2

Author: Business Desk

South Korea’s household debt hit a record high in the second quarter amid the continued record-low interest rate, central bank data showed on Tuesday.

The household credit, which includes debts owed by households to banks and other financial institutions as well as purchase on credit, amounted to 1,805.9 trillion won (1.55 trillion US dollars) as of end-June, up 41.2 trillion won (35.3 billion US dollars) from three months earlier, according to the Bank of Korea (BOK).

It marked the highest since data began to be compiled in 2003. The household credit kept a record-breaking trend as the BOK left its key rate unchanged at an all-time low of 0.50 percent since May last year. People rushed to purchase new homes and invest in stocks with borrowed money amid the low-rate policy.

Mortgage loan gained 17.3 trillion won (14.8 billion US dollars) to 948.3 trillion won (813.5 billion US dollars) in the April-June quarter, and the credit loan spiked 21.3 trillion won (18.3 billion US dollars) to 757 trillion won (649.4 billion US dollars).

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